AUGUSTA — A plan to refinance existing debt while also funding the proposed expansion and renovation of Lithgow Library, without the need for a tax increase, is up for City Council discussion Thursday.
However, the more pressing issue for councilors to decide may not be what funding proposal they bring to voters to pay for the proposed, $11.7 million expansion of the city-owned public library. Instead, it may be when to ask them — in June or November.
City administrators said councilors need to decide soon which election to target for the library funding referendum vote, at least if they want to hold it as part of the June primaries.
“If it’s June, the council has to decide forthwith,” City Manager William Bridgeo said.
Barbara Wardwell, city clerk, said ballots have to be available for absentee voters at least 30 days before the election and need to be printed at least 45 days before the election.
So if councilors plan to put a referendum question seeking to bond money to help renovate and expand Lithgow, they have until mid-April, at most, to decide. The only council business meeting scheduled to occur between now and then is April 3, though, Wardwell noted, councilors could schedule a special meeting to vote on sending the referendum question to voters in June if needed.
Bridgeo said “there are credible reasons for going in June and credible reasons for waiting until November. Clearly, a November vote will have larger turnout and offer substantially more time for the issue to be presented to and understood by the public. On the other hand, there does appear to be some financial advantage to a June vote. …”
The potential financial advantage of a June vote relates to the financing plan put together by Bridgeo and Ralph St. Pierre, finance director and assistant city manager, to pay for the library project.
Their proposal would pay for the city’s share of the library project with a new, 15-year bond package that would fund the library work, the increased anticipated operating costs of the larger library building, and the cost of moving the library into temporary quarters during construction, while also refinancing $7.6 million in existing employee pension debt.
Bridgeo said the plan would extend the time period over which the city would pay back the existing pension debt, which otherwise would be paid off in four years.
However, he said doing so, while also incorporating the library debt, could fund the library project without the need to seek a tax increase to pay for the work. That’s because the bond payments and other costs would be less, annually, than what the city already is spending to pay off the remaining four years of the pension debt.
In 2016, for example, the total combined cost of paying back the 15-year bond would be $1.35 million, compared to the $1.4 million the city would pay on the pension bond if it is not refinanced for a longer term, saving $56,000 in that year’s budget, according to St. Pierre.
The potential immediate financial advantage of a June vote, according to Bridgeo, is derived from the fact that city has a $1.6 million payment coming up in October on the pension bond. If that debt is refinanced before October, it could save the city about $56,000 and the school department, which shares the pension debt obligation, $128,000, this year in reduced debt payments.
Library advocates have said they favor a June vote but would go along with whatever council decides.
Wick Johnson, co-chairman of the library’s fundraising campaign, said construction could start in the spring of 2015, after voters approve the project in either June or November.
The Friends of Lithgow Library, the nonprofit group raising funds to renovate and greatly expand the library, has pledged to raise $3 million for the project, helping to offset the cost of the library. They’ve already raised more than $2.3 million in cash and pledges.
Councilors are scheduled to discuss, but not vote upon, the library financing proposal at their meeting Thursday, which begins at 6:30 p.m. in council chambers at Augusta City Center.
Councilors are also scheduled to:
• discuss redistricting the boundaries between the city’s four voting wards to comply with state law requiring them to be of roughly equal populations;
• hear a presentation on a paddle park;
• discuss a request from the Maine chapter of the National Alliance for the Mentally Ill to sponsor a Community Development Block Grant proposal to assist the organization in creating a workforce training program;
• consider a request from the Greater Augusta Utility District to allow the district to buy a small portion of the former Hodgkins Middle School property from the city for replacement of a water tower and making other improvements on an adjacent lot;
• consider a zone change, recommended by the Planning Board, adding municipal and public utilities and communications facilities as allowed uses in the Planned Development 2 zoning district; and
• read a proclamation for National Service Recognition Day.
Keith Edwards — 621-5647 [email protected] Twitter: @kedwardskj